Volume 13, Issue: 2, December 2018 APRIL 2017 INDEPENDENT POWER PRODUCERS ASSOCIATION

MONTHLY NEWSLETTER

Welcome to the twenty-first edition of Independent Power Producers Association (IPPA) Newsletter. The newsletter is published on a monthly basis to ensure regular dissemination of information to Member IPPs and other stakeholders, and also to provide a platform to discuss issues pertinent to the energy sector of . We would like you to send us your feedback and comments on how to improve the monthly newsletter.

Monthly Infographics

Outstanding Dues as of 15th November, 2018 in PKR Millions

Outstanding Dues Comparison (15th Oct-15th November)

Grand Total

Others Overdue

CPP Overdue

EPP Overdue

- 50,000 100,000 150,000 200,000 250,000 300,000 EPP Overdue CPP Overdue Others Overdue Grand Total November 128,280 73,503 69,223 271,007 October 129,358 65,785 67,349 262,491

Source: Member and Subsidiary IPPs

Monthly Infographics

Billing and Payments in November 2018 in PKR Millions

Billing & Payments 30,000 26,015 25,000

20,000 17,141 15,470 15,000

9,162 10,000 6,860 5,131 5,000 1,176 2,015 - EPP CPP Others Total

Billing Payments

Source: Member and Subsidiary IPPs

Net Generation and Plant Utilization in November 2018

Source: Member and Subsidiary IPPs Local News

Minister warns of Indiscriminate NPPMCL’s RLNG-based Power action against Power Pilferers Projects

Islamabad: Federal Minister for Energy, Karachi The Economic Coordination Omar warned in unequivocal Committee (ECC) of the Cabinet has terms that those who are involved in power approved issuance of government guarantee theft would be dealt indiscriminately as the to National Power Parks Management debt incurred by electricity pilferage has Company Ltd (NPPMCL) for raising Rs 38 overburdened national economy. Addressing billion funds from financial institutions to a press briefing here at Chief Minister’s meet the financing needs for two RLNG- House on Saturday, he said that there would based power plants - Balloki and Haveli be a zero tolerance policy for power Bahadur Shah. A proposal put up to the pilferers and those who have getting direct ECC Finance Division contended that connections through ‘Kumda’s would be NPPMCL owned by federal government dealt with an iron hands and was established with the mandate to operate indiscriminately. The federal minister said two re-gasified liquefied natural gas that circular debt under electricity losses (RLNG) based power generation plants at have been reached to an alarming figure of Balloki, district Kasur, and Haveli Bahadur 1300 billion that is a matter of grave concern Shah, district Jhang, with capacity of 1223 owing to its perils on country’s MW and 1230 MW respectively. The economy. He informed that monthly losses projects had been approved by the Executive of Pesco have been reached to Rs 4 billion Committee of the National Economic adding among the losses 3.7 billion rupees Council (ECNEC) in February 2016 at the were from Bannu region and certain areas of total cost of Rs 190.44 billion. Of the total Mardan and Peshawar valley. He said that cost, Rs 114 billion was provided by the consumers that are regularly paying their federal government as cash development electricity bills are affected by forced load loan (CDL) to the NPPMCL at the standard shedding due to line losses and electricity terms during the fiscal years 2015-16 and theft. He said that we have been directed by 2016-17. The amount of cash development Prime Minister, to devise a loan of Rs 114 billion disbursed to comprehensive plan and a result-oriented NPPMCL was acquired as advance against strategy to resolve the issue aiming equity injection by the PDFL and to partially facilitation of regular bill payers and the fulfill the funding requirements of poor. Federal Minister informed the media NPPMCL, short-term loan of Rs 32.738 that people would get relief by curbing billion was also provided by the PDFL. Now Kunda culture while duration of forced load the NPPMCL has requested Finance and shedding would be gradually decreased in Power Divisions to arrange project financing areas that would show increased revenue requirements of Rs 70 billion to pay off the generation and decrease line losses. remaining cost of projects and short-term loan of PDFL. The ECC was also told that Source: Business Recorder the financing requirements of the NPPMCL wants,” he added. Additional Secretary were examined and it was decided, in Ministry of Industries and Production, consultation with relevant stakeholders, that Abdul Jabbar Shaheen that in order to the principal amount of Rs 32.738 billion formulate a plan for operationalization of the provided by PDFL to NPPMCL as short- PSM, MoI&P official intend to have term loan would be converted into PDFL detailed sessions with PSM management in equity into NPPMCL. the coming week, therefore, PSM management is required to start working on Source: Business Recorder war footings in this regard.

Source: Business Recorder Hubco CE Preparing Different

Models Ajk Consumers to Be Charged At

Islamabad: A private sector group headed by Par with Other DISCOS’s Chief Executive Hub Power Company (Hubco) Khalid Mansoor, is reportedly Islamabad: The federal government has preparing different models for rehabilitation decided to charge AJ&K domestic of Pakistan Steel Mills (PSM), to be shared consumers using 1-100 units at par with with the federal government. Finance those of other power Distribution Minister, , who is also the Companies (Discos) whereas bulk power Chairman of Cabinet Committee on supply will be made from CPPA-G as is Privatization (CCoP), had assigned this being done in case of K-Electric as per tariff responsibility to Prime Minister’s Advisor determination by Nepra. Electricity on Commerce, Textile, Industries and Department of AJK receives the power in Production and Investment, Abdul Razzak bulk and sells the electricity to its consumer Dawood. According to sources, a couple of in AJK at the distribution tariff rates Russian and Chinese companies have shown determined by Nepra and notified by GoP. interest in acquiring stakes in the PSM. The Funding required to purchase electricity is representatives of these companies intend to provided to Government of AJK by physically visit the mills which is Government of Pakistan through its dysfunctional for the last more than two budget. Government of AJK had been years but salaries are being paid to disputing the rates being charged by the employees. The incumbent government has Discos . The matter was repeatedly taken up also paid billions to the employees without at the highest levels and, finally, in the year ant duty. When contacted Khalid Mansoor 2003 in the contract agreement of Mangla said, his team is comprised of technical Dam Raising Project. Ministry of KANA & people who worked in Engro and Engro SAFRON constituted a sub-committee to Polymer for due diligence, refurbishment firm up and submit its recommendations and relocation, in addition to experts who regarding rate of new electricity tariff for have already worked in PSM etc. “We will AJK beyond September 30, 2003; submit our unbiased assessment to subsequently, in last meeting of the sub- government and then it will be up to the committee chaired by federal Secretary government to opt whatever option it Water and Power, it was decided that the tariff for AJK should be fixed at second and third working sessions, Rs.5.79/kWh, which is the tariff for 1-100 respectively. Lt. Gen Muzammil Hussain unit slab of domestic category, as majority (retd) and former governor State Bank Dr of electricity consumption in AJK falls in Shamshad Akhtar who also served as that slab of electricity tariff. This tariff will caretaker federal minister enlightened the remain applicable from July 1, 2015 till next participants on various challenges and tariff determination of 2015-16. opportunities in the energy sector of Pakistan. Source: Business Recorder

Source: Business Recorder CJCSC underscores Self-Reliance for Energy Security 300MW Coal-Fired Power Plant

Islamabad: Chairman Joint Chiefs of Staff Board of Private Power & Infrastructure Committee (CJCSC) General Zubair Board (PPIB) on Tuesday granted extension Mahmood Hayat on Monday said that in Letter of Support (LoS) of +660kV affordable and sustainable energy supply is HVDC Matiari-Lahore Transmission Line crucial to steer the country out of economic Project and Letter of Intent (LoI) of 300MW crises. “Self-sufficiency and self-reliance is coal-fired power plant at Gawadar. Minister needed to ensure energy security,” he for Power Omar Ayub while presiding over emphasized, addressing as chief guest at the Board’s 121th meeting said that present closing session of a seminar titled: ‘Energy government is working seriously on Security Policy: Thinking Beyond the controlling theft and losses as well as re- Norm.’ President CPSD, Lt-Gen. Agha M hauling of transmission and distribution Umer Farooq (retd) welcomed the system of country to remove bottlenecks in participants in his inaugural address. He the supply of electricity to consumers. underlined the significance of the subject, Sustainability in the system is only possible saying that commitments of the energy by brining transparency in power system, producer and habits of consumers need to be induction of indigenous and renewable changed to encourage conservation, energy and introduction of new technology efficiency and a fuel mix, comprising in transmission and distribution indigenous resources. Renowned nuclear systems. Managing Director PPIB Shah scientist Dr Samar Mubarak Mand presented Jahan Mirza briefed the Board on a keynote speech at the inaugural session implementation status of the portfolio of and shared his thoughts on the energy power generation and transmission line security prospects in Pakistan. Seminar projects currently being processed by PPIB. comprised three working sessions focused In this regard, the Board gave necessary on Water and Power, Oil and Gas and approvals aiming to facilitate project Renewable and Alternative Energy. Ghias sponsors for implementing their projects in a Khan, CEO ENGRO Corp, Uzma Adil smooth and speedy way. Keeping in view Khan, Chairperson OGRA and Amjad Ali the importance of much needed +660kV Awan, CEO Alternative Energy HVDC Matiari-Lahore Transmission Line Development Board, chaired the first, Project which is specifically designed to provide power evacuation for Thar coal embezzlement and ill-gotten based power projects, the Board agreed to money. Minister stated that of Rs 650 allow extension in Letter of Support for billion, half of circular debt share was achieving Financial Close considering the related to Peshawar Electric Supply merits that it is the first HVDC and first Company (Pesco). Member Committee private sector project under CPEC which has Aurangzeb Khan said electricity should be achieved substantial progress and such supplied to FATA’s consumers because they extension would not compromise the were ready to pay bills. Minister stated that completion date of the project which is Discos were replacing kundas with ABC March 2021. cable. Secretary Power Division said that in some areas of Pesco entire villages were Source: Tribune Pakistan using stolen electricity. He further stated that the Power Division had arrested 19 Govt to Recover Rs150bn from employees of Lesco. He acknowledged that Power Defaulters some Discos were sending inflated bills to

consumers. Chief Executive Tribal Electric Minister for Power Omar Ayub said that the Supply Company (Tesco) informed the government will recover Rs 150 billion from committee that the company faced Rs 7 defaulters during the current fiscal year for billion financial loss during war on terror. which a drive had already started. He was He briefed the committee that the replying to questions raised by the members company’s consumers were 0.442 million. of Senate Standing Committee on Power The company does not have funds to under the chairmanship of Senator Fida rehabilitate some grids and other systems. Muhammad. Minister maintained that losses However, Additional Chief Secretary for in FATA were 84 percent, adding there were FATA assured that whatever funds were issues both in Pesco and Tesco. He said allocated for Tesco in PSDP would be stoppage of electricity theft and recovery released soon. Omar Ayub further stated that from defaulters was a challenge, adding that the government was taking action against share of 66 percent losses in Pesco were power thieves indiscriminately, adding that related to Dera Ismail Khan, Bannu and FIRs had been registered against 8,000 Peshawar. He said the share of Pesco in electricity thieves. He said honest consumers accumulated circular debt was Rs 250 were facing the brunt of electricity billion. Secretary Power Irfan Ali who is thieves. He said 1.5 percent losses had been actively monitoring drive against power slashed during recent drive against sector defaulters and theft informed the defaulters and theft. Senator Moula Bux committee that overall circular debt stock Chandio stated that it would be a great was over Rs 1.3 trillion which included achievement if the incumbent government loans parked in PHPL. He said, in resolved the issue of circular debt. Balochistan and KP, Discos officials were frightened in the name law and order. In Source: Business Recorder fact, it is an issue of corruption, SSGC Stops Gas Supply to CNG Govt to focus on Renewable Energy Sector, Captive Power Plants Projects

The Sui Southern Gas Company (SSGC) Prime Minister Imran Khan is giving announced on Tuesday that it was stopping preference to hydel and renewable energy supply of gas to the compressed natural gas projects for resolving energy related (CNG) sector and captive power plants. To problems in Pakistan. He said that due to the ensure uninterrupted supply of gas to its efforts of the Chief Justice of Pakistan and domestic and commercial consumers, the the prime minister, Bhasha Dam would be SSGC is discontinuing supply to the CNG constructed and funding issue would also be sector and captive power plants till further resolved. He was addressing national notice. conference on energy crisis and its solutions Sindh Minister for Energy Imtiaz Shaikh organized by Punjab University College of said the federal government`s decision to Earth and Environmental Sciences (CEES) stop gas supply to the captive power plants in collaboration with Pakistan Association in the province was bound to cause for Advancement of Sciences (PAAS) at unemployment and stir an industrial crisis. University Law College’s auditorium here The minister said that gas loadshedding was on Monday. PU Vice Chancellor Prof Niaz a serious matter on which the prime minister Ahmad, University of Jhang Vice had taken another U-turn. Only two days Chancellor Prof Dr Shahid Munir, Rifah ago, the premier had promised Karachibased University Vice Chancellor Prof Dr Arshad, industrialists of an end to the loadshedding CEES Principal Prof Dr Sajid Rashid, PAAS but the very next moment the supply to the General Secretary Dr Saleem Chaudhry, captive power plants was stopped, creating a scientists and engineers from various parts big crisis which would affect a number of of country, faculty members and a large factories, he added. Keeping in view the number of students participated in the considerable reduction in RLNG supplies conference. In his address, Ejaz Chaudhry due to one-day outage of Engro Terminal for said that the government was working on undertaking maintenance activities, RLNG producing energy through solar, wind, wave, supplies to the Punjab industry and CNG hydel and other projects. He said that there sectors shall remain suspended for next 24 was abundance of natural resources in hours starting from 0000hrs on December 12 Pakistan and we could construct a large and ending at December 13 (12am),` said a number of small and big dams to utilize press release issued on Tuesday protest by water resources. However, he said, Pakistan drawing attention of the federal minister for would face water crisis in the next 10 to 15 petroleum to the first right of Sindh on the years and we need to prepare ourselves to gas it produced and urged the prime minister avoid this crisis. He said that our to take notice of the decision to stop supply communication and distribution systems to the captive power plants and order its were obsolete and the government would restoration. curb line losses and electricity theft Source: DAWN Pakistan incidents during its five-year tenure. Source: Business Recorder Rs 25.75bn Supplementary Grant new i.e. 215.28 MMCFD (69.96 MMCFD Approved for process and 145.32 MMCFD for captive) for the period after October 16, 2018. The The federal cabinet has approved Rs 25.75 subsidy calculation has been projected at Rs billion supplementary grant to provide 25.75 billion up to June 2018. subsidy to zero-rated export-oriented Source: Business Recorder industry and captive power plants (CPPs) for use of re-gasified liquefied natural gas (RLNG). The cabinet also approved a gas CPPA-G becomes Market Operator subsidy of Rs 5.5 billion to maintain the prices of fertilizer at current level. To The power sector in Pakistan is structurally minimize the price differential between flawed. Being the most dominant player imported and local LPG, the cabinet has also sector, the government has failed to institute reduced the GST rate from 17 percent to 10 the necessary reforms required for the percent. The cabinet decided that gas supply financial and operational sustainability of to the industrial sector [exporters of the the power sector. At the core of the problem zero-rated sectors namely textile (including is the use of take or pay contracts, which are jute), carpets, leather, sports and surgical most often than not inflexible documents goods] in Punjab will be revised from 28:72 guaranteeing electricity off-take by the to 50:50 for domestic gas and RLNG government that does not have any credible respectively. The weighted average gas tariff demand forecasts to plan its purchases. The of such consumers shall be $ 6.5 per result is excess capacity payments burden on MMBTU. The cabinet reversed a decision of the exchequer and an uncompetitive allocating system gas to only zero-rated electricity market. Across the globe, industry for production purposes only. Now, countries have opted for competitive energy subsidized gas will be provided to zero-rated market models, which essentially trade industry both for production purposes and electricity market as a commodity on an electricity generation. Previously, in view of exchange. The interaction between demand electricity shortage, significant volume of and supply forces results in minimum gas was required to be consumed by the wastage of power while ensuring reliable industrial sector for power generation; supply at the same time. In a welcome however, given the assured availability of move, Pakistan has also embarked on electricity in the system, the subsidized gas making the transition to a competitive was not allocated for captive market based electricity model. The powers. Minister for Petroleum and Natural transition will hopefully take not more than Resources, said that three years and is expected to be concluded like domestic consumers, industrial by July, 2020. Recently, the government has consumers are also very important for the given permission for the Central Power economy of country. M/s SNGPL will Purchasing Agency (Guarantee) Limited provide a subsidy calculation at $ 6.5 per (CPPA-G) to become the market operator, MMBTU taking into account actual gas/ which will allow the entity to purchase and RLNG consumption by the 536 zero-rated sell power in line with a market based industry consumers (process+ captive) old/ mechanism. Currently the entity is carrying out two functions that include procurement borrowing will increase the debt stock of of power and energy market development. PHPL to Rs 800 billion. The sources said Going forward, the CPPA-G will only carry Power Division has given the target to out market development and will need to Discos to recover Rs 80 billion from old separate or remove its power procurement receivables while freezing the receivable role. However, stakeholders have also figures as they stood on October 31, 2018. expressed other reservations, which include Discos have also been directed to recover questioning the financial strength of the another Rs 60 billion by controlling theft CPPA-G to become a market operator. and improving governance/ efficiency. This Indeed, the overall capacity of the CPPA activity has already started across Pakistan needs to be drastically improved before it and in the long run will help in setting off can successfully carry out its role as a the impact of industrial support package market operator. Currently, it relies on subsidy. Power Division maintains that the sovereign guarantees by the federal general public and the officials of Discos are government, which will not be there once getting the message of a proactive anti-theft the competitive market is in place. campaign and there is a visible decline in the incidents of electricity theft. This can be Source: Business Recorder illustrated by the decrease in line losses by 1.5 per cent during October 2018. It is an Govt’s steps to help reduce circular encouraging result of this campaign and as it scales up, it will leave a lasting beneficial debt, Power Division claims impact in future. According to Power

Division, the anti-corruption and anti-theft Power Division claims that recent measures drive has shown positive effects on recovery taken by the federal government will help of outstanding dues as well. It has motivated reduce circular debt which is hovering the consumers to pay the bills on time. around Rs 600 billion. The government has increased power tariff by 11 per cent, in Source: Business Recorder addition to crack down against defaulters and electricity thieves. With these drives, the collection from consumers has improved by Rs 13.7 billion. Last week Power Division informed Prime Minister Imran Khan that it is making serious efforts to reduce circular debt. For this purpose, a commercial loan of Rs 35.8 billion has been acquired to reduce the burden further. The Power Division has also finalized arrangement to get Rs 100-200 billion Islamic financing on behalf of PHPL against 43 assets of Discos and Gencos to bring down the circular debt aimed at saving late payment surcharges on payments to IPPs. However, insiders claim the new International News

Fortnum deploys battery to aid Swedish located in Extremadura, Andalucía and Aragon, and hydropower plant expected to commence operation by end of next year. OPD Energy intends to develop a 50MW Finnish clean energy solutions firm Fortnum has capacity at La Fernandina solar plant in announced it will deploy a 5MW/6.2MWh battery Extremadura. At Andalucía, the firm will build two system to assist a Swedish hydropower plant. The 50MW capacity plants – each at Puerto Real of new battery energy storage system will support the Cadiz and Alcala de Guadiana of Seville. The company will also develop 148MW capacity, which Forshuvud hydropower plant by providing will be distributed among the new photovoltaic frequency regulation services in order to balance the solar plants in Los Belos of Zaragoza and Montesol grid. Fortnum head of asset management for of Teruel and their extensions too. In Chile, the hydropower Martin Lindström said: “Batteries are company intends to build a 50MW capacity solar thought to be used mostly to store energy. Now, facility. The construction of this plant will be however, we will try connecting a battery to a carried out within the framework of 176GWh per year block of energy award secured by the company hydropower plant with the idea of improving the during the public energy tender in 2016. plant’s ability to function as regulating power for the Nordic electricity network. The battery’s very Source: Power Technology quick response time improves the speed and preciseness of the Forshuvud hydropower plant’s regulation, so we are able to provide even better EGPE begins construction of three new service to grid companies. We hope that this Spanish solar plants significant innovation helps us to more quickly Enel Green Power España (EGPE), a renewable achieve Sweden’s ambitious targets for renewable energy division of utility company Endesa, has energy use and create a cleaner world. An begun construction of three Spanish solar plants overwhelming majority of Sweden’s grid frequency with a combined capacity of around 127MW. The regulation is provided through hydropower projects, three solar facilities at Navalvillar, Valdecaballero but according to Fortnum, batteries could play a and Castilblanco, being built with an investment of more prominent role in this in the future as short- nearly €100m, will have an installed capacity of term and quick response balancing has a ‘wear and more than 42MW each. It will be the company’s tear’ effect on hydropower turbines. first solar parks in Badajoz province of the Extremadura region. Enel Global Renewable Source: Power Technology Energy head Antonio Cammisecra said: “These three projects further strengthen our presence in OPD Energy Plans Global Solar Projects Spain, where we have started construction of ten with Combined Capacity of 500 MW new renewable projects over the last two months. “In addition to actively expanding the company’s Spain-based energy assets developer OPD Energy is presence in the country, our aim is to continue planning to build seven photovoltaic (PV) global solar projects in Spain, Chile and Mexico next year, promoting innovation by applying cutting-edge which will have a combined capacity of 500MW. technologies based on digitalization and Financed under Project Finance Scheme with robotisation, as well as sustainability by various financial institutions, the company will implementing best practices already in place in our invest nearly €500m on these projects. In Spain, construction sites worldwide.” OPD Energy will construct seven PV plants with a combined capacity of 300MW. These plants will be Source: Renewable Energy World

RENEWABLES: TRAJECTORY AND PROSPECTS As Britain reached its maximum coal production in 1918, it faced a drastic slump in the following years, reminding it of the finitude of resources, which was blatantly exploited. History repeated itself when similar status of production was achieved in 2000 for oil & gas in North Sea. This is just one of many examples that force us to probe into the dilemma of cost, efficiency and more importantly scarcity; dictating the former two. Something other than conventional fuels was the need for future security. The introduction of the concept of renewable energy in the public consciousness in 1970s introduced the prospect of an ethical and environmentally cognizant method of energy generation. However back then, no one could have predicted the pace with which it propelled through these past 4 decades. Ambitious climate policies and dramatic fall in the production of renewable energy sources (RES), specifically solar and wind, seem to be two glaring factors. Evidence of their emergence in contemporary times is their coverage of 1/3 of power mix in Europe, 1/4 in China and 1/6 in the United States, India and Japan. Its share in the global power generation mix was a startling 25% in 2017. During same year, solar and wind were responsible for 20% and 30% of the additional power generation respectively. As for what the future entails for RES, International Energy Agency (IEA) expects renewable electricity generation to rise by over one-third by the year 2022. Considering all these indicators, we can wholeheartedly say that, given the global attitude, climate concerns, productivity, technology and market mechanism, RES is here to stay and dictate the future global energy dynamics. It is imperative to note here that Solar, among other RES, has proved to be more sustainable and productive for most investors. David McKay, an energy expert from U.K identified Solar panels in Desert sun to produce the most Watts per square metre, from a point of view of geological and spacial-based output. ‘Wind drought’ in western Europe earlier this year in August cemented the erratic effect of wind power, though the output lost was more than replenished by the solar sector. This came up on the radar of ‘Vaisala’, a company that collects and analyzes weather-related data globally.

Global gait It is prudent to have a bird’s eye view at the direction of renewable utility across the globe. Ambitious plans and policies –especially in Asia –have helped to install over 600 GW of solar and wind capacity since 2010. As reported by Reuters, the fastest increase was recorded in European Union (in Germany and the UK), followed by China, Brazil, the United States, India and Japan.

Source: Enerdata

EU can be seen carrying the flag, though fueled primarily by subsidies. Taking heed from this experience, one wonders if PTI govt. can match this factor with their climate change commitments whilst simultaneously curbing the fuel import bill. Moreover, technology is progressing by leaps and bounds and has emerged as the second major factor for the recent reports quoting productivity boosts in RES. Carrying along EU as an example, following graph depicts the country-wise trend.

Source: Reuters

As for policy examples, California quite recently voted to get 100% of its electricity from renewable sources by 2045. Even Africa, South Africa and Angola are at the bulwark of facilitating IPPs in renewable sector, by commissioning different entities to expedite the pace of competitive bidding, infrastructure development and supply chain management.

At micro level, as far as possible avenues of investment are concerned, the opportunity in smart city projects in Pakistan can be seized. Valuable Learning can be gained from the experience of Southern Company as its general manager of hydropower, Herbie Johnson, shared at Power-gen platform. They developed a microgrid around a new community of 64 smart homes. The homes use solar and battery energy storage and have smart interconnected devices that talk to the grid and know when to turn on and off according to the energy supply available. This endeavor gave a high profit margin. The only prerequisite for its implementation here is the cohort of right customers. The concept to subsidize solar home systems (SHS) is also afloat in the local media nowadays.

Reluctance Regarding Renewable Yet, issues besetting renewables are and will be requiring due attention to detail. Following are the few ones that are –keeping naivety aside –tip of the ice berg.

Cannibalization: As societies explore the various ways to generate renewable energy, some technologies will overcome others. Renewable energy (RE) can be produced at a lower cost than traditional sources meaning that there’s less revenue to be made. As a consequence, some RE companies will be starved out of the industry. Technological vigilance is imperative to stay best among the rest.

Inflexibility: One of the earliest doubts hovering renewable energy i.e. how to manage intermittent nature has not yet been addressed? |For instance, wind and solar energy are not viable in places where sun shines erratically or the wind isn’t consistent. Moreover, storage facilities are still a question mark. Bloomberg New Energy Finance (BNEF) Report suggests that “precipitous reductions” in cost will enable intermittent renewables power to be stored and discharged to meet shifts in demand and supply.

Domestic Aura Government intends to focus towards clean energy and increase its share in the energy mix. A consultative process involving key stakeholders of renewable energy sector has been started since the new Government took over to ensure sector recommendations are incorporated in the policy. During this consultation process, role of AEDB was critiqued on account of sitting on a draft request for proposal (RFP) for solicitation of renewable energy on competitive terms for the last three years. The sector experts were of the view that such delays are detrimental to the promotion of clean energy. The government is aiming to finalize the renewable energy policy by January 2019. Alternate Energy Development Board (AEDB) is of the view that indigenous resources of natural gas accounted for 24% of electricity produced in the country and alternatives are needed direly to compensate for rapidly depleting gas resources. Moreover, Pakistan should aim for generating at least 30% of electricity from renewable energy resources in the next five to seven years. Presently, Re-gasified liquefied natural gas (RLNG) is being imported to lessen reliance on indigenous gas reserves. Out of which, 63% is used for power generation which is not a feasible option given its high tariff of up to Rs9.02 per kilowatt-hour; from a consumer’s perspective. However, as much as policy formulation is taking priority, the hurdles in executing on ground projects paint a different picture. For instance, Gharo-Jhimpir Wind project is halted due to pending issues related to lease of land. On the flip side, power production from 20 operational wind power projects in Sindh has gone up to 1037 Megawatts (MW) while completion of four more (200 MWs potential) wind energy plants is underway. In addition, 35 wind projects are in different stages of development in the province and can generate up to 2500 MWs electricity.

Future Outlook One of the key quotable reports is, “Pakistan’s Power Future: Renewable Energy Provides a More Diverse, Secure and Cost-Effective Alternative,” produced by the Institute for Energy Economics and Financial Analysis (IEEFA), analyses the current energy system in Pakistan while suggesting an alternative energy model for 2030. It estimated present energy mix ratio of 70:20:10 with 70pc being thermal and 20pc hydro, with nuclear power making up most of the rest. IEEFA’s proposed energy model to 2030, aimed at providing a cheaper, more diversified electricity generation system for Pakistan roughly split in a ratio of 30:30:30:10 between 30pc renewables, 30pc thermal, 30pc hydro, and 10pc nuclear power. This is attuned with aforementioned AEDB recommendations. As far as local predictions are concerned, NEPRA's forecasts of Pakistan’s energy generation mix by 2025 is a baby step towards the right direction. Though, the expectations from wind and solar aren’t that high.

Key studies  “Pakistan’s Power Future: Renewable Energy Provides a More Diverse, Secure and Cost-Effective Alternative,” produced by the Institute for Energy Economics and Financial Analysis (IEEFA)  Tribune piece “Pakistan’s renewable energy agenda” by Khurram lalani.  Nepra's forecasts of Pakistan’s energy generation mix by 2025.  “Renewable energy resource potential in Pakistan” by Munawar A. Sheikh published in the Journal of Renewable and Sustainable Energy Reviews.  “An assessment of renewable energy potential for electricity generation in Pakistan” by M.K Farooq and S. Kumar from Asian Institute of Technology, Thailand.

Titbit- For those having interest in climate change and relevant tech. ‘carbon engineering’ firm should be checked out. Their work is quite groundbreaking in producing carbon free fuel extracted from atmospheric carbon dioxide.

Our Members

Primary Alternate Gross Capacity Net Capacity Member IPPs Fuel Fuel (MW) (MW)

1 The Hub Power Company (Tehsil Hub) RFO HSD 1292 1200

2 Pakgen Private Limited RFO - 365 350

3 Lalpir Private Limited RFO - 362 350

4 Kohinoor Energy Limited RFO - 131 126

5 TNB Liberty Power Limited GAS HSD 235 211

6 Uch Power (Private) Limited GAS - 586 551

7 Rousch (Pakistan) Power Limited GAS HSD 412 395

8 Habibullah Coastal Power (Pvt.) Co. GAS HSD 140 126

9 Attock Gen Limited RFO HSD 165 156

10 Atlas Power Limited RFO HSD 225 214

11 Nishat Power Limited RFO HSD 200 195

12 Nishat Chunain Limited RFO HSD 200 195.6

13 Liberty Power Tech. Limited RFO HSD 200 195

14 Orient Power Company Limited GAS HSD 229 213

15 Saif Power Limited GAS HSD 229 209

16 Sapphire Electric Company Limited GAS HSD 225 209

17 Halmore Power Generation Co. Ltd. GAS HSD 225 209

18 Engro Powergen Qadirpur Limited GAS HSD 227 217

Subsidiary IPPs

19 Hub Power Company Ltd (Narowal) RFO - 220 214

20 Uch-II Power (Pvt) Ltd GAS - 404 375.2

21 Saba Power Company (Private) Limited RFO - 134 125.5

Established in 2010, IPPA serves as an advisory body for Independent Power Producers (IPPs) in

Pakistan. IPPA liaises with the government and related departments such as NEPRA, SECP, WAPDA, CPPA-G, NTDC and PPIB and also serves as a facilitator between various IPPs and stakeholders within the power sector. If you have any suggestions or feedback, kindly write to us at [email protected]